China Bans Nvidia’s AI Chips

Nvidia just can’t seem to catch a break.

After beating a ban on China sales imposed by the Trump administration, the tech giant is now facing a ban on its products by Chinese regulators.

Chinese internet regulator Cyberspace Administration of China (CAC) ordered top Chinese tech companies like Bytedance and Alibaba to end their testing and orders of Nvidia’s RTX Pro 6000D chips, the Financial Times reported on Wednesday citing people with knowledge of the matter.

Nvidia unveiled the RTX Pro 6000D chip, a lower tech chip designed just to be sold in China under compliance with American export control rules, earlier this year. The chips were initially designed to fill the void left by the then-banned H20 chips, another lower tech China-only chip. The H20s were recently reapproved for sale by the U.S. but orders have not yet begun shipping out. China is also advocating for the U.S. government to approve the sale of higher tech Blackwell chips to China.

The move comes as the latest breaking point of a fraying relationship between China and Nvidia.

Last month, Chinese authorities started questioning and cautioning industry titans like Tencent over their purchases of Nvidia’s H20 chips, according to Reuters.

“We can only be in service of a market if a country wants us to be,” Nvidia CEO Jensen Huang said at a press conference on Wednesday in response to a question about the China CAC. “I’m disappointed with what I see but they have larger agendas to work out between China and the United States. And I’m patient about it. We’ll continue to be supportive of the Chinese government and Chinese companies as they wish.”

Nvidia has been caught up in the middle of a trade storm between the two countries.

China’s AI industry was largely dependent on American chipmaker Nvidia’s chips but that might all be changing soon. After Trump’s blanket ban earlier this year choked off the Chinese industry from access to Nvidia chips, Chinese chip development has ramped up. China chip stocks have experienced a major boom so big that the Beijing-based company Cambricon had to warn investors recently.

“The message is now loud and clear,” an unnamed Chinese tech executive told the FT. “Earlier, people had hopes of renewed Nvidia supply if the geopolitical situation improves. Now it’s all hands on deck to build the domestic system.”

Although no chip, Chinese-made or otherwise, has been considered up to par with Nvidia’s offerings, the Financial Times article paints a different picture.

After talking to top Chinese tech companies Huawei, Cambricon, Alibaba, and Baidu about their chip development, Beijing has concluded that Chinese AI processors are now comparable or even better than the downgraded Nvidia products that are allowed into China, according to the FT, citing a person with knowledge of the matter.

“The top-level consensus now is there’s going to be enough domestic supply to meet demand without having to buy Nvidia chips,” an industry insider told the FT.

The Chinese chip industry is having a good day. Alibaba shares rose after the company secured a prominent Chinese customer, state-owned telecommunications operator China Unicom, for its new AI chips. Baidu’s shares in Hong Kong jumped by the most they have in more than three years after analysts voiced confidence in the search engine operator’s chip venture.